Alibaba, Tencent Investors Look Past Slow Growth to AI Potential

China’s twin technology leaders outlined steady progress in AI spheres from agents to cloud services, winning investors over despite lackluster results that reflected the challenges of monetizing artificial intelligence.

Alibaba Group Holding Ltd. recorded its first operating loss since the depths of the Covid pandemic in 2021, partly because of the cash it’s funneling into AI initiatives. Chief Executive Officer Eddie Wu said his company’s prioritizing AI growth over the bottom line — meaning it’s likely to spend “far, far” more than previously targeted. Annual recurring revenue from models and services should hit 10 billion yuan ($1.5 billion) in June and is on track to triple to 30 billion yuan by the end of the year. The firm’s shares rose about 8% in Hong Kong.